UNITED STATES OF AMERICA PRIVATE
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE ACT OF 1934
Rel. No. 39589 / January 28, 1998
AUDITING AND ACCOUNTING ENFORCEMENT
Rel. No. 1007 / January 28, 1998
Admin. Proc. No. 3-7625
:
In the Matter of : ORDER
: REINSTATING
STEVEN C. WOLFE, SR., CPA : PRIVILEGE
2173 Sand Dollar Drive : TO PRACTICE
Longmont, CO 80503 : BEFORE THE
: COMMISSION
:
:
Steven C. Wolfe, Sr., a certified public accountant, has
filed an application seeking to reinstate his privilege of
practicing before this Commission. Pursuant to former Rule 2(e)
of our Rules of Practice, / in an Order dated December 10, 1991
("Order"), we denied Wolfe the privilege of appearing or
practicing before us. / The Office of the Chief Accountant and
the Division of Enforcement (together "the Staff") do not oppose
Wolfe's reinstatement, provided he complies with the undertaking
he submitted with his application for reinstatement. Under the
circumstances, we deem it appropriate to reinstate his privilege
on that basis.
The Order is based on a district court order enjoining Wolfe
from violating, or aiding and abetting the violation of,
antifraud and periodic reporting provisions of the federal
securities laws. / Wolfe also was ordered to disgorge losses
avoided from a stock sale made while in possession of material
non-public information, and to pay an additional civil penalty.
This injunctive action stemmed primarily from Wolfe's
involvement, from January 1, 1986 to March 31, 1987, as Corporate
Controller, in overstating revenues at Miniscribe Corporation.
Wolfe first applied in 1993 for reinstatement of his
privilege to appear and practice before us. We denied that
application, stating that "the time elapsed since the imposition
of the sanction (approximately two years) is not sufficient to
permit a reasonable determination whether Wolfe possesses the
qualifications and fitness necessary to justify
reinstatement." / Our order expressly stated that Wolfe was not
precluded from applying for reinstatement and attempting to make
the requisite showing at a later date. Wolfe subsequently
submitted a second application for reinstatement. In October
1996, our Secretary advised Wolfe that because this Commission
was evenly divided on the matter of whether Wolfe had shown good
cause for reinstatement, Wolfe would continue to be precluded
from practice before us.
In the application now before us, Wolfe acknowledges the
severity of his misconduct and accepts responsibility for his
actions. He points to several factors that he contends
demonstrate his rehabilitation. In particular, Wolfe advises
that he has been employed since 1991, in positions of increasing
responsibility, by Anatel Corp., a small privately-held
manufacturing company. / Wolfe also states that he has
completed a series of continuing professional education courses
and taught accounting for several years, on an adjunct basis, at
a community college. / He further relies on his cooperation
with authorities in connection with the criminal prosecution and
conviction of two principals involved in the Miniscribe fraud.
Additionally, Wolfe has submitted an undertaking in
connection with this application, by which he undertakes and
agrees that, if reinstated, he will at all times comply with the
following conditions:
1. In practicing before this Commission as a preparer or
reviewer of financial statements required to be filed
with this Commission, or as a person responsible for
the preparation or review of financial statements
required to be filed with this Commission, Wolfe's work
will be reviewed by the independent audit committee of
the company or in some other manner deemed acceptable
to the staff of this Commission;
2. In practicing before this Commission as an independent
accountant Wolfe will submit an application to this
Commission containing a satisfactory showing to this
Commission that:
(a) Wolfe, or any firm with which he is or becomes
associated with in any capacity, is and will
remain, a member of the SEC Practice Section of
the AICPA's Division for CPA Firms; and,
(b) Wolfe, or the firm, prior to Wolfe's resuming
practice as an independent accountant, has
received an unqualified report relating to his or
the firm's latest peer review conducted in
accordance with the guidelines adopted by the SEC
Practice Section; and,
(c) Wolfe will comply with all applicable SEC Practice
Section requirements, including all requirements
for periodic peer reviews, concurring partner
reviews, and continuing professional education, as
long as he appears or practices before this
Commission as an independent accountant.
The Staff does not oppose Wolfe's reinstatement provided
that his reinstatement is subject to compliance with his
undertaking. The Staff advises that, in the six-year period
since we denied Wolfe the privilege of practicing before us,
there has been no evidence that Wolfe has engaged in further acts
of professional or ethical misconduct. The Staff also states
that Wolfe "has made a consistent, concerted and successful
effort to reform and develop his professional conduct" and
posits that "the suspension has been of sufficient duration to
permit a reasonable determination that Wolfe presently possesses
the qualifications and fitness necessary to justify
reinstatement." /
Rule 102(e)(5) of our Rules of Practice governs applications
for reinstatement, and provides that this Commission may
reinstate the privilege to appear before us "for good cause
shown." As we stated in our order denying Wolfe's first
application, the determination of "good cause" is necessarily
highly fact specific. In making that determination, we are
guided by the purpose of the Rule, which is "to determine whether
a person's professional qualifications, including his character
and integrity, are such that he is fit to appear and practice
before the Commission." /
Under all the facts and circumstances presented, we find
that Wolfe has shown good cause for reinstatement. Although
Wolfe's misconduct was serious, he has demonstrated that a
reoccurrence of his past misconduct is unlikely, and that he
presently possesses the qualifications and fitness necessary to
justify reinstatement. In addition, Wolfe's conformance with the
undertaking will provide continuing assurances about Wolfe's
professional conduct in his practice before this Commission.
Accordingly, it is ORDERED that Steven C. Wolfe, Sr.'s
privilege to appear and practice before this Commission be
reinstated, provided that he comply fully with the undertaking
contained herein.
By the Commission (Chairman LEVITT and Commissioners
JOHNSON, HUNT, CAREY and UNGER).
Jonathan G. Katz
Secretary
/ While we revised comprehensively our Rules of Practice in
1995, we made no substantive changes to Rule 2(e), other than
to renumber it as Rule 102(e).
/ In the Matter of Steven C. Wolfe, Sr., CPA, Securities
Exchange Act Rel. No. 30054, Accounting and Auditing
Enforcement Rel. No. 344 (December 10, 1991), 50 SEC Docket
698. Wolfe consented to issuance of the Order without
admitting or denying any of the allegations, except those as
to jurisdiction and the existence of an injunction.
/ SEC v. Wiles, No. CIV.A.91-M-1393 (D. Colo. Nov. 25, 1991).
/ Securities Exchange Act Rel. No. 34209, Accounting and
Auditing Enforcement Rel. No. 569 (June 14, 1994), 56 SEC
Docket 2923.
/ Wolfe has been Vice President-Finance of Anatel since
November 1994. Anatel is audited on an annual basis by a
national accounting firm.
/ Wolfe took one continuing education course as part of a
stipulation agreement regarding licensing with the Colorado
State Board of Accountancy. He has taken voluntarily other
courses in both ethics and accounting. Wolfe remains
suspended by the Colorado authority until his privilege to
practice before this Commission has been reinstated.
/ The Staff notes the following additional facts reflecting
Wolfe's efforts at reform: Wolfe's work record appears to be
exemplary; Wolfe has cooperated fully with law enforcement
personnel in various proceedings related to the Miniscribe
fraud; Wolfe consistently has fulfilled the requirements
imposed upon him by the Colorado State Board of Accountancy
as a result of the Order; and Wolfe has demonstrated
persistence in seeking readmission d candor in his
submissions.
/ Touche Ross v. SEC, 609 F.2d 570, 579 (2d Cir. 1979).
(..continued)